Some Companies Confused Over Certification Requirement
August 14, 2002
Top executives at nearly half the companies required to do so have certified their financial statements ahead of today's deadline. But many companies reportedly remain confused about their responsibilities and potential penalties.
- For example, Tyco International contends it is not covered by the Securities and Exchange Commission order because it is headquartered in Bermuda -- but if forced to certify; its new chief executive has the added problem of being asked to attest to financial data covering periods before he joined the company.
- Confusion has also arisen because several different rules are taking effect, and one of them threatens up to $5 million in penalties and 20 years in prison for executives who sign false statements -- while no penalty is specified for an executive who simply fails to file.
- There is a debate in the legal community over whether the certification has to be filed with a 10-K or an 8-K form -- or with some sort of correspondence that is not even public information.
- The SEC order covers 947 of the country's largest companies -- although only 700 face today's deadline because of varying fiscal years.
As of yesterday afternoon, about 300 companies had filed certificates.
Credit-rating agencies have threatened to downgrade companies that fail to meet the deadline.
Source: Jonathon D. Glater, "Companies Certify Data Today; Some Seem Quite Confused," New York Times, August 14, 2002.
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